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2015 PORK Management Conference
“Your Pork Industry Investment”
New Orleans, LouisianaMaria C. Zieba
Manager of International Affairs
National Pork Producers Council
June 18, 2015
2013 2014 % Change 2013 2014 % Change
World $ 6,049,819,352 $ 6,674,430,723 10% 2,144,327 2,178,484 2%
Japan $ 1,883,339,463 $ 1,932,380,193 3% 424,551 468,719 10%
Mexico $ 1,223,687,112 $ 1,557,750,665 27% 626,377 680,842 9%
Canada $ 844,527,157 $ 904,677,284 7% 227,409 207,363 -9%
China/Hong Kong $ 902,758,570 $ 775,412,933 -14% 416,993 337,305 -19%
South Korea $ 276,193,708 $ 444,559,794 61% 99,350 135,395 36%
ASEAN 162,426,455$ 188,484,799$ 16% 69,620 70,499 1%
Philippines $ 112,253,797 $ 103,650,283 -8% 50,060 38,876 -22%
Singapore $ 44,467,370 $ 80,037,331 80% 17,311 29,971 73%
Australia $ 176,153,394 $ 181,620,636 3% 53,924 50,101 -7%
CAFTA-DR $ 148,894,277 $ 163,999,946 10% 60,453 56,484 -7%
Dominican Republic $ 43,401,951 $ 47,076,121 8% 18,694 16,898 -10%
Colombia $ 88,312,553 $ 134,107,138 52% 34,274 47,442 38%
Chile $ 61,670,513 $ 49,315,836 -20% 24,197 19,109 -21%
Taiwan $ 40,318,896 $ 38,254,825 -5% 18,104 15,720 -13%
Others 241,537,254$ 303,866,674$ 26% 89,075 89,505 0%
Source of Data: Global Trade Atlas
U.S. Pork and Pork Variety Meat Exports 2013-2014
Partner CountryTonsUS Dollars
2014 2015%
Change2014 2015
%
Change
World 2,242,648,054 1,933,384,882 -14% 776,913 726,104 -7%
Japan 670,191,515 552,361,365 -18% 169,060 149,849 -11%
Mexico 475,649,760 413,594,216 -13% 221,312 237,997 8%
China/Hong Kong 316,253,464 214,244,954 -32% 140,693 99,184 -30%
Canada 267,002,446 253,438,965 -5% 65,100 63,539 -2%
South Korea 167,769,059 241,757,007 44% 57,423 79,402 38%
Australia 81,530,307 62,064,893 -24% 24,223 18,585 -23%
ASEAN 68,624,464 28,213,781 -59% 27,307 12,984 -52%
Philippines 37,296,602 20,261,469 -46% 14,655 10,251 -30%
Singapore 29,742,695 5,798,063 -81% 12,040 1,912 -84%
CAFTA-DR 52,873,417 53,642,338 1% 19,887 22,099 11%
Dominican Republic 16,722,517 19,382,677 16% 6,357 5,780 -9%
Colombia 47,646,396 40,851,196 -14% 18,541 15,651 -16%
Taiwan 16,086,871 12,297,541 -24% 6,288 6,050 -4%
Others 79,020,355 60,918,626 -23% 27,079 20,764 -23%Source of Data: Global Trade Atlas
U.S. Pork and Pork Variety Meat Exports US Dollars Metric Tons
Partner Country/Region
January-April January-April
• Pacific Maritime Association (PMA) and the International Longshore and Warehouse Union’s (ILWU) ratified their contract the week of May 18.
• Q1 2015 export numbers reflect the severity of the issue
• Shipping companies charged unjust fees for their inability to pick up and drop off containers/equipment during slowdowns– Added costs to producers
• NPPC continuing to play an active role and meet with U.S. officials and other groups– Proposed legislation to avoid future instances in the
pipeline
West Coast Port Slowdown
Transportation Legislation
• S. 1298 Port Performance Act: Measure port productivity to identify port disruptions before they cause economic damage and to enable more rapid and effective response – Cosponsors: Senators Thune, Gardner, Fischer and
Alexander
• S. 1519 Protecting Orderly and Responsible Transit of Shipments (PORTS) Act of 2015: Measure to amend the National Labor Relations Act to provide additional authority to governors under Taft Hartley specific to port-related issues.– Cosponsors: Senators Gardener and Alexander
COOL•United States lost final COOL appeal on May 18th
•Retaliation could be implemented within months
• Repeal bill passed in House – Repeal on the Senate side will be an uphill battle
• Request of $3 Billion retaliation to be imposed in key states
• President Elect John Weber participated in hearing on March 25 on COOL– Senate Hearing scheduled June 25
• COOL Reform Coalition– Meat sector involvement, but led by Corn Refiners Association,
National Association of Manufacturers and the Chamber of Commerce
• Fix needs to be WTO Compliant
Trade Promotion Authority
• TPA passed through Senate on May 22– Poison pill amendments failed– NPPC signed on letters opposing two amendments
• Senate passed Trade Adjustment Assistance (TAA)
• Trade Preferences (AGOA, Haiti and GSP) and Customs Reauthorization also passed through Senate in May
• House voted to pass TPA on June 12 but bill structure prevents full passage– New vote TODAY– 219 to 211; 28 Democrats joined Republicans– Tougher fight in House than in the Senate– Tea Party Republicans and Democrats problematic
Trade Promotion Authority
• National Congressional Outreach
– January Statement & Letter to the Hill– Letter to Congress with NPPC and 70 other food and Ag groups– Letter to Congress from NPPC and 39 State pork producer
affiliates– NPPC very active on the Trade Benefits America Steering
Committee – NPPC acts as secretariat for all the Ag groups in setting up Ag
specific Hill TPA meetings separate from Trade Benefits America meetings
– NPPC set up Ag TPA briefings for House and Senate staff– NPPC regularly shares intel with all the Ag groups – NPPC producer testified at House Ag Committee hearing on
importance of trade to U.S. agriculture– Politico webpage takeovers – Sponsorship of Politico Playbook, Politico Morning Trade and
Politico Morning Ag at various times during the past three months
– Letters to reject poison pill amendments
• State and Local Outreach– State Ag groups sent letters to their congressional
delegation• California, Illinois, Indiana, Iowa, Kansas, Michigan, Nebraska,
North Carolina, Ohio, Oklahoma, Oregon, Texas, Washington, Wisconsin
– Grassroots pork producer Call to Action generating producer letters
– Op-Eds
– Reaching out to consumers through Keep Food Affordable (KFA) website
Trade Promotion Authority
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 20140.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
20 FTA Countries 174 Non-FTA Countries
Pork Exports & Free Trade AgreementsBillions of Dollars
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014-800
-700
-600
-500
-400
-300
-200
-100
0
US Trade Balances with FTA Countriesand the Rest of World
20 FTA Countries 174 Non-FTA Countries
Bil
lion
Doll
ars
NAFTA
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012 2014
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
U.S. Pork Exports to NAFTA Countries
MexicoCanada
Year
Metr
ic T
on
s
Mexico EIF Jan 1994
Canada EIF Jan 1989
DR- CAFTA
20012002
20032004
20052006
20072008
20092010
20112012
20132014
0
5,000
10,000
15,000
20,000
25,000
Honduras Dom. Rep. Guatemala Costa RicaEl Salvador Nicaragua Panama
Year
Metr
ic T
on
s
EIF Mar/Apr/Jul
2006 U.S.
El Salvador Honduras NicaraguaGuatemala
EIFMar 2007Dom. Rep.
EIFJan
2009Costa Rica
U.S. Export Growth
Since EIF
DR-CAFTA: 305%
El Salvador: 1196%
Honduras: 184%
Nicaragua: 593%
Guatemala: 257%
D.R.: 314%Costa Rica:
763%Panama:
102%
EIFOcto-ber
2011Panam
a
Australia FTA
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
Year
Metr
ic T
on
s
U.S.-Australia FTA
Entry into Force 2005
U.S. Export Growth
9 Years BeforeEntry into
Force:
3,323 Metric Tons
U.S. Export Growth
10 Years AfterEntry into
Force:
46,667 Metric Tons
Chile FTA
19941995
19961997
19981999
20002001
20022003
20042005
20062007
20082009
20102011
20122013
20140
5,000
10,000
15,000
20,000
25,000
Year
Met
ric
Tons U.S. Export Growth
10 Years BeforeEntry into Force:
-8 Metric Tons
U.S. Export Growth10 Years After
Entry into Force:
19,068 Metric Tons
U.S.-Chile FTAEntry into Force
2004
Source: Darci Vetter, USTR; IDB Integration and Trade Sector based on INTrade.
RTA Expansion 1975
RTA Expansion 1995
Source: Darci Vetter, USTR; IDB Integration and Trade Sector based on INTrade.
RTA Expansion 2014
Source: Darci Vetter, USTR; IDB Integration and Trade Sector based on INTrade.
Trans-Pacific Partnership (TPP)
TPP• NPPC continues to demand elimination of all tariff
and non-tariff barriers
• Japan willing to make tough concessions to its so-called sensitive sectors
• Japan’s powerful farm lobby has conceded to structural reform as part of ‘Abenomics’
• Also watching Vietnam and Australia closely
• Need TPA to signal Congress and Administration’s willingness to conclude negotiations
Japan’s Suppliers, 2003
Source: Alexis Taylor, USDA Deputy Under Secretary for Farm and Foreign Agricultural Services
TPP Deliverables
• Malaysia eliminated all non-tariff barriers ending its de facto ban on U.S. pork
• New Zealand eliminated the most trade distorting aspects of its non-tariff barriers resulting in U.S. pork sales at retail
• Chile and Peru eliminated their trichinae testing requirements for chilled U.S. pork
• Singapore lifted its ban on the use of PRTs
Australia
• Australian restrictions are related to porcine reproductive and respiratory syndrome (PRRS) and postweaning multisystemic wasting syndrome (PMWS)
– Confirmed PMWS in domestic herd– Delay risk assessment on PRRS, but watching
New Zealand process closely
• Pork Plant Approvals– Australia limits imports from the United States
to only U.S. facilities that have been approved by Australia.
Growth Opportunities: Vietnam & Malaysia
TPP will provide improved market access to developing markets like Vietnam and Malaysia, two of Asia’s most dynamic economies and a growing market for agri-food products.
Vietnam:
• Vietnam has a young and growing population. 43 percent of the population of 93 million is 25 years old or younger.
• Vietnam’s economy is growing rapidly. Since 2007 per capita growth has doubled.
• Since joining the WTO in 2007, U.S. Ag exports to Vietnam have more than doubled to $2.3 billion.
Malaysia:
• Malaysia has a young and growing population. 45 percent of the population of 30 million is 25 years old or younger.
• Demand for U.S. Ag products has risen steeply, increasing 2.5 times over the last 10 years.
Source: Alexis Taylor, USDA Deputy Under Secretary for Farm and Foreign Agricultural Services
Vietnam
Vietnam lifted the white offal ban on Sept. 1st, but with certain conditions
• Additional registration, certification requirements for all its trading partners, and limited to 3 ports of entry
• Direct result of NPPC involvement• White offal makes up the majority of U.S. pork exports to Asian countries
Sanitary and non-tariff barriers imposing a de facto ban• Zero tolerance for pathogens• Plant registration• Reference Price
NPPC Efforts• Working with the U.S. apparel industry to ease U.S. textile rules in TPP• USDA Catfish Rule
Malaysia
• July 2012 banned all export of U.S. pork and pork products
• No equivalence recognition of the U.S. federal meat inspection. Malaysian government provides approval for pork imports on an establishment by establishment basis.
Singapore
• Impose restrictions on U.S. pork exports based on unscientific concerns of trichinae transmission
• U.S. government working on an exchange of letters with Singapore to lift mitigation
• Impose unscientific shelf life requirements and time requirements on manufacture date
• May also impose unknown pathogen testing
• Amended import regulations to allow pathogen reduction treatments (PRTs)
Chile & Peru
• Peru recently accepted APHIS proposal to allow chilled pork from the U.S. into their market; Chile passed a similar rule in February
• NPPC worked closely with U.S., Chilean and Peruvian officials
South AfricaPotential to add $40 million of U.S. pork
exports
• AGOA renewal legislation moving along with trade bills • Commercial interest, but lack of access
– PRRS, Pseudo rabies, trichinae– Transport, origin of animals, etc.
• Poultry access recently negotiated after a ten year trade dispute
• Negotiations ongoing for pork access• NPPC has been engaged with South African and U.S.
governments and providing scientific resources
T-TIP
Removal of all EU barriers will significantly increase U.S. exports
• U.S. cabinet officials stated unequivocally that agriculture would be part of the negotiations
• EU has stated it is unwilling to eliminate tariffs on some agricultural products: beef, poultry and pork.
• U.S. exports more pork to smaller countries like Honduras than the entire EU
Lithuania• FSIS proposed rule to grant equivalency of meat inspection
systems with Lithuania, one of the Eastern European countries with active African Swine Fever (ASF) outbreaks
• If the U.S. contracted ASF it would decimate the pork industry
• NPPC Position: APHIS must conduct formal risk assessments of the ASF outbreaks in Lithuania and its neighboring states before USDA takes any further steps to facilitate the movement of pork from Lithuania to the U.S.
• Swine Industry specialists traveling to Eastern Europe this June to assess the situation
• China is a potentially enormous market for U.S. pork• About half of the world’s pork is consumed in
China• Dr. Dermot Hayes estimates that the market for
U.S. pork in China could be well over a million MT.
• U.S. pork imports are constrained by:• Ban on the use of ractopamine in imported pork• Discriminatory value added tax (VAT)• Large subsidies to domestic producers• Other restrictive practices
China
Argentina
• There is currently no export certificate to export to Argentina.– U.S. fresh and frozen pork are ineligible for export to
Argentina
• Argentina has unscientific trichinae mitigation requirements
• Argentina’s trade relations with all of its partners has greatly diminished under current President Cristina Fernández de Kirchner
NPPC Takes No Position on Cuba
• President’s Executive Order is limited and does not fully address the financing issue that currently restricts agriculture trade– Must lift embargo completely to solve access problem
• Market potential of 11 million consumers, but TPP represents 805 million people
• Key members still object to the president’s actions on Cuba
• Recent Congressional Delegations to Cuba included Sen. Stabenow and Rep. Pelosi
Canada Non-ambulatory Pig Export Certificate Proposal
• Canadian plant audit– Resulted in proposed export requirement updates that include
handling of non-ambulatory, non-injured pigs in packing plants – Request not supported by science nor outcomes-based equivalency
• Estimated cost to U.S. industry to comply, $66 million
• NPPC vehemently opposes acquiescing to Canada’s request and stands behind current U.S. animal handling procedures– FSIS Collaboration to Represent Industry Response– USDA & USTR Engagement– Canadian Embassy Enrollment– Canadian Government at Ottawa– PPIC Member Input
• FSIS met with CFIA early February refusing to budge at this time
• Conversation continues, no export stoppage to Canada
Taiwan
• Legislative Yuan passed legislation on beef MRLs on July 25, 2012
– Maintaining all bans on the drug in pork
– Approved an MRL of 10 ppb for beef, the standard adopted for muscle by Codex in July
• The Government of Taiwan has stated it has no intention of lifting ban on pork
• Taiwanese government and business groups making a hard push to set up entrance to TPP and initiate a Trade and Investment Framework Agreement (TIFA)
– NPPC has actively worked to stall these engagements until Taiwan lifts ban on pork imports
India• De facto ban on U.S. pork due to India’s Veterinary Certificate
– Ruminant Feeding Ban– Animal Disease Restrictions– Veterinary Drug Residues– Plant Approvals– Animal Origin– Processed Pork
• New draft certificate currently in the comment period would eliminate many of the restrictions
• Food Safety and Standards Authority of India issued a new draft Order on Meat and Poultry – Would maintain the current ruminant feeding ban– Would impose a prohibition on the use of some antibiotics in animal
feed– Scheduled to go into effect in July 2015
T-TIPMajor barriers to U.S. pork exports
• Tariff rate quota (TRQ) smaller than Uruguay Round minimum access
• Ban on ractopamine• Trichinae mitigation requirements• Prohibition on pathogen reduction
treatments (PRTs)• Plant approvals • Other issues that aren’t currently on the
table: animal welfare, cloning, other technologies
